How the gig economy will shape 2016

The gig economy is making a major impact on the IT industry, and millions of IT pros are taking advantage of the flexibility, freedom and income-generating potential it has to offer. Here's what's hot (and what's not) in the gig economy for 2016.

It's difficult to gauge exactly how large the gig economy is, but judging by the number of 1099-MISC forms received by the IRS -- which employers are required to file when hiring and paying freelance workers -- it's growing fast. Approximately 82 million 1099s were filed in 2010. By 2014 that number grew to an estimated 91 million.

"CIOs are finding that the gig economy can help them resolve many talent challenges they've struggled with for some time. There's a huge opportunity for businesses here, and a large pool of flexible, highly skilled workers almost on-demand. CIOs have the opportunity to tap into a scalable workforce that can help them meet IT needs and reduce costs," says Harry West, vice president of services product management for IT consulting firm Appirio.

Freelance and contract marketplace Upwork sees approximately $1 billion worth of freelance work passing through its site annually, and is uniquely positioned to notice trends and spot hot tech buzz before it hits the mainstream. Here's what to expect in the freelance and contract gig economy for 2016.

What's hot: virtual teams -- What's not: on-site work

More businesses than ever will begin structuring themselves as "remote first" instead of "remote friendly" or "on-site only," says Rich Pearson, senior vice president of marketing and categories at Upwork. According to Upwork's 2015 Freelancing in America research, one in three Americans freelanced in 2014, and 60 percent of freelancers are choosing to do so instead of being forced out of necessity. That gives businesses greater access to a more flexible, highly available talent pool that's not restricted to a specific geographic area.

"We're seeing companies becoming more remote-friendly. Teams may want to work from home, or companies want to hire a particular person with special skills or knowledge that's not in their geography. Tools like Slack and other virtual collaboration tools are making it so easy for teams anywhere to work together. The growth in 2016 is going to accelerate rapidly, we believe," says Pearson.

IT companies are also embracing remote workers as a way to address talent and skill gaps, and speed up time to hire, says Upwork's Mateo Bueno, senior director of product management. The average time to hire a skilled, knowledgeable freelancer via a talent marketplace like Upwork is three days, allowing companies to move quickly on mission-critical IT projects. In addition, hiring from outside tech hubs like Silicon Valley or the New York City area can save businesses money.

"When companies are in a tech hub, they're looking at extremely high recruiting costs, higher pay and a greater risk of having their valuable talent poached. We've seen that remote workers, even freelancers, have a greater loyalty and commitment to companies they work with, and a global access to talent can be a major competitive advantage," Bueno says.

As enterprise services move to the cloud and technology becomes increasingly mobile-centric, business are turning to lean, independent consultants and freelancers with a strong integration background to serve their IT consulting needs and work individually with existing IT teams and other contractors, says Pearson. There's no longer a great need for large, unwieldy teams of consultants who may move more slowly or can't get their hands dirty on integration projects.

"We saw in 2015 that the number of businesses spending money on large IT consulting projects in our marketplace increased by 22 percent year-over-year. These larger projects indicate that more companies are enlisting independent consultants or small agencies for projects. At the same time, we're seeing a slowdown in growth in the traditional IT consulting market that includes major firms," Pearson says.